Government funding of tertiary education

What We Have Found

After adjusting for inflation, government expenditure on tertiary education was 8.3 percent higher in 2016 than in 2002 (June years).

Date Updated: April 2017

Indicator Description

This indicator includes three measures of government funding of tertiary education:

  1. government expenditure on tertiary education
  2. inflation-adjusted government expenditure on tertiary education, and
  3. government expenditure on tertiary education as a percentage of gross domestic product.

(See the 'definition' document for a more detailed description of these measures.)

Why This Is Important

The government plays a crucial role in ensuring lifelong access to education and skills development through its investment in tertiary-level learning outcomes.  A knowledge economy places a premium on innovation, ideas and the ability to adapt to new technologies and ways of working.  Access to tertiary-level education helps ensure individuals and their communities are equipped for life in a knowledge economy.  In this context, an accessible, high-quality, tertiary-level education system must be financed to meet many needs and provide a wide range of choices for all New Zealanders. Government support for tertiary education takes a variety of forms and reflects the diversity of learners and their needs, helping to remove barriers to participation and ensuring that the tertiary system is able to cope with changing levels of demand.

How We Are Going

Government's total expenditure on tertiary education for the year ended June 2016 was $4.05 billion.  This was 3.6 percent lower than the spending of $4.18 billion for the year ended June 2015. Of the expenditure in 2015/16, $3.26 billion was on areas such as tuition subsides and research, while $790 million was spent on student support, that is, the net cash cost of student loans and student allowances.  A major factor in the decline in expenditure from 2015 to 2016 was an increase in repayments to the Student Loan Scheme, rather than a reduction in lending. 


Figure 1: Total government expenditure on tertiary education
Graph titled 'Figure 1: Total government expenditure on tertiary education' visually depicting the analysis and description. Click here to go to the indicator's data page.

Notes:

  1. Student loan expenditure is calculated as lending minus repayments
  2. Source for Figure 1: Ministry of Education (2016)


Total government spending (including student support and capital expenditure) on tertiary education grew over the period from 2002 to 2016 by 42 percent, up from $2.84 billion in 2002. In inflation-adjusted terms, this represented an increase of 8.3 percent.

The major items in government's tertiary education expenditure over the period from July 2015 to June 2016 were:

  • $2,160 million student achievement component and Youth Guarantee
  • $180 million industry training
  • $486 million student allowances
  • $526 million research (Performance-Based Research Fund, centres of research excellence and Vote Science and Innovation contestable funds)
  • $303 million student loans (net cash cost)

As a percentage of gross domestic product, total government expenditure on tertiary education, reached a high of 2.3 percent in the year ended June 2010, before decreasing to 1.6 percent in the year ended June 2016. 


Figure 2: Government funding of tertiary education as a percentage of GDP
Graph titled 'Government funding of tertiary education as a percentage of GDP' visually depicting the analysis and description. Click here to go to the indicator's data page.

Note:

  1. Source for Figure 2: Ministry of Education (2016)

References